Question

Boretti has $400,000 in a stock fund. The fund pays a 10% return, compounded annually. If he does not make another deposit into the account, how long will it take for the account to increase to $2 million?

Answer 1

it will take 16.89 years for the account to increase to $2 million.

Step-by-step explanation:

PV = $400,000

FV = $2,000,000

I/Y = 10%

Solving for N in:

FV = PV * (1 + I/Y)N

$2,000,000 = $400,000 * (1.10)N

5 = (1.10)N

N = 16.89 years

Therefore, it will take 16.89 years for the account to increase to $2 million.